Richard Cohen, Still Defending Jim Cramer…
When I see columns like this gem from Richard Cohen, it reminds me of Orwell’s view of the internal dynamics of Great Britain. Whatever else you can about the Villagers, they’re a family. Dysfunctional, yes – abusive, yes – but still a family, and like any family, they close ranks when an enemy approaches:
But the role that Cramer and other financial journalists played was incidental. There was not much they could do, anyway. They do not have subpoena power. They cannot barge into AIG and demand to see the books, and even if they could, they would not have known what they were looking at. The financial instruments that Wall Street firms were both peddling and buying are the functional equivalent of particle physics. To this day, no one knows their true worth.
It does not take cable TV to make a bubble. CNBC played no role in the Tulip Bubble that peaked, as I recall, in 1637, or in the Great Depression of 1929-41. It is the zeitgeist that does this — the psychological version of inertia: the belief that what’s happening will continue to happen.
It’s probably time we all got over the Stewart-Cramer showdown, if only because the whole incident has made something very clear: The Village journalistic establishment is determined not to learn its lesson. It is determined, in fact, not to hear any of the criticisms that were levelled at it. That’s why Cohen is trotting out precisely the same arguments that Cramer tried to use to defend himself during the interview: There wasn’t anything I could do, I don’t have subpoena power, even the bigshots didn’t know the whole thing was about to collapse, etc.
Cohen thinks he really has something with that last point. He writes up a short list of former investment bankers who lost billions of their own money in CDOs and credit swaps, and reasons that if they had known what was coming, they would have sold everything right away. That’s true, but it’s irrelevant. The criticism of the business media that Stewart was making – and that many others have tried to make before and since – wasn’t that Cramer, CNBC and its counterparts knew that a crash was coming and didn’t report it. The criticism is that they knew that Wall Street was peddling these credit derivatives, that they were immensely complicated and nobody quite understood them, and bought into the same money-gushing euphoria that the bankers and insurers did.
And actually, that’s exactly what Cohen is saying – how were we to know that all this paper was worthless if the bigshots doing the trading didn’t know? That is always the excuse. How were we to know that the anthrax that showed up in mailboxes all over the country in the wake of 9/11 wasn’t coming from Saddam Hussein, if that’s what Bush & Co. thought? How were we to know that Iraq possessed no weapons of mass destruction and posed no threat to the United States, if that’s what the administration believed?
That’s what makes this so fascinating as an artifact of Villager thinking. Cohen has – without intending to – identified the prime malaise of the journalistic establishment: The abandonment of skepticism, the unquestioning embrace of the worldview to which the political and business elites of this country subscribe. For the life of them, they can’t seem to understand that with it comes an abdication of whatever claim to moral and social authority they may have.
